Short Sale vs Foreclosure - Marshall Carrasco Sparks, NV Short Sale Expert
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Short Sale Vs. Foreclosure
www.renohelp.orgCall : 775-525-1205
Foreclosure
Issue 1
Successful Short Sale
Future Fannie Mae Loan- Primary Residence 1
A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae-backed mortgage for a period of 5years.
A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae- backed mortgage after only 2 years.
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Foreclosure
Issue 2
Successful Short Sale
Future Fannie Mae Loan- Non-Primary2
An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae-backed investment mortgage for a period of 7 years.
There is no similar declaration or question regarding a short sale.
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Foreclosure
Issue 3
Successful Short Sale
Credit Score
• Score may be lowered anywhere from 250 to more than 300 points. • Typically will affect a credit score for over 3 years.
• Only late payments on a mortgage will show, and after sale, mortgage is normally reported as 'paid as agreed', 'paid as negotiated', or 'settled'. • This can lower the score as little as 50 points if all of the other payments are being made. • A shore sale's effect can be as brief as 12 to 18 months.
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Foreclosure
Issue 4
Successful Short Sale
Credit History
Foreclosure will remain as a public record permanently, and on a person's credit history for 10 years or more.
• A short sale is not reported on a credit history. • There is no specific reporting item for 'short sale'. • The loan is typically reported 'paid in full, settled'.
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Foreclosure
Issue 5
Successful Short Sale
Security Clearance
• Foreclosure is the most challenging issue against a security clearance outside a serious misdemeanor or felony conviction. • If a client has a foreclosure and is a police officer, in the military, in the CIA, security, or any other position that requires a security clearance, in almost all cases clearance will be revoked and position will be terminated.
On its own, a short sale does not challenge most security clearances.
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Foreclosure
Issue 6
Successful Short Sale
Current Employment
• Employers have the right and are actively checking the credit of all employees who are in sensitive positions. • In many cases, a foreclosure is reason for immediate reassignment or termination.
A short sale is not reported on a credit report and therefore not a challenge to employment.
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Foreclosure
Issue 7
Successful Short Sale
Future Employment
• Many employers are requiring credit checks on all job applicants. • A foreclosure is one of the most detrimental credit items an applicant can have and in most cases will challenge employment.
A short sale is not reported on a credit report and is therefore not a challenge to future employment.
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Foreclosure
Issue 8
Successful Short Sale
Deficiency Judgment (Not Applicable in California)
In 100% of foreclosures (exceptin those states where there isno deficiency), the bank has theright to pursue a deficiencyjudgment.
In some successful short sales, it is possible to convince the lender to give up the right to pursue a deficiency judgment against the homeowner.
www.renohelp.orgCall : 775-525-1205
Foreclosure
Issue 9
Successful Short Sale
Deficiency Judgment (amount)
In a properly managed short sale, thehome is sold at a price that should beclose to market value, and in almostall cases will be better than an REO sale resulting in a lower deficiency.
• In a foreclosure, the home will have to go through an REO process it does not sell at auction. • In most cases this will result in a lower sales price and longer time to sale in a declining market. • This will result in a higher possible deficiency judgment.
www.renohelp.orgCall : 775-525-1205
9740 S. McCarran Blvd #103, Reno, NV 89523
Contact MARSHALL CARRASCO
www.renohelp.org
Call Us : 775-525-1205
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